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Hi sir,
I have doubt in this question Sec b agreement one they asked what is finance cost charged to p/l ??
The answer is 19607
I don’t understand why they didn’t deduct deposit 20000 from $200,000?..
Secondly I have doubt in agreement 2
They did 4800*8/3 I understand why they divide by 3 is because Qstn asked for quarter But I didn’t understand why they multiply by 8???Thirdly, I have doubt in agreement 3 where they asked what profit should br recognise as a result of sale and leaseback??
The answer is 6486$ but I didn’t understand how?? I see answer but still unable to get it. Can you please explain me my doubts regarding leases. It would be really great. Thanks in advance.
Have a great day
Hi,
Sorry, but I can’t seem to find the question that you are referring to.
I can give you advice in relation to the first point you make, in that the 200,000 figure given in the present value of future lease payments and the key is in the word ‘future’. A deposit is not a future payment as it is made at inception of the lease, and so it will not be included within the 200,000 figure given. If it is not included in the figure then it does not need to be deducted.
If you point me in the direction of where I can find the question then I can help you with the other points.
Thanks
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